Operating environment

PAVING

INFRA PROJECTS

BUILDING CONSTRUCTION

 

Growth drivers

 
  • The public sector’s investments in road maintenance
  • Major road projects
  • Urban growth centre development
  • Repair backlog
  • Several years’ investment gap in Russia
  • The public sector’s and industry’s investments in infrastructure
  • Urbanisation
  • Need for energy production renewal
  • Weak infrastructure in the Baltic countries and Russia
  • Migration to city centres
  • Decrease in family size
  • Change in demographic
  • Apartment as part of investment assets
  • Increased logistics and storage needs
  • Old building stock in a poor condition
  • In Russia, constant need for apartments and high dwelling density
 

Outlook for the near future

 
  • In Finland, the weak economic situation of the public sector affects road maintenance negatively
  • Growth in Scandinavia
  • Stable market situation in the Baltic countries
  • In Russia, funding depends on economic development. Allocation decisions are political.
  • Major infrastructure projects underway and being planned in Finland
  • New and replacement investments in the energy sector increase demand in all Nordic countries
  • Strong growth in Scandinavia
  • In the Baltic countries, infrastructure construction is supported by EU funding
  • In Finland, renovation projects patch declining new construction
  • Economic uncertainty and increasing unemployment decrease the demand for housing, demand focuses in urban growth centres
  • In Russia, the outlook is very uncertain and the direction of growth is difficult to forecast
  • The limited scope of the Russian financial markets influences mortgaging

 

Competitive field and the most significant competitors

 
  • Lemminkäinen holds a strong position in the Nordic and Baltic countries; it is one of the largest paving companies
  • The industry entry threshold has become lower
  • In Russia, the company operates in the paving business mainly as a subcontractor
  • The most significant competitors: NCC, Skanska, Veidekke, Peab, Colas; in Russia: Major Russian players, such as Mostotrest and VAD
  • In Finland, Lemminkäinen is the market leader in the industry in terms of net sales
  • Of the different forms of contract, PPP and alliance projects are increasing
  • In Scandinavia, competition is increased by Central European players
  • The most significant competitors: NCC, Skanska, Veidekke, Peab, YIT, SRV, Destia
  • In Finland, Lemminkäinen is among the five largest builders
  • When it comes to small- and medium-sized contracts, there are many minor players and the industry entry threshold is low
  • In Russia, apartments are built by several local players. In the comfort-class residential construction, there is less competition.
  • The most significant competitors: YIT, SRV, NCC, Skanska; in Russia, also LSR and Settle Group

 

 Market development

 

Finland

Sweden

Norway

Denmark

Baltic countries

Russia*

Paving

Infra projects

Building construction

Other building construction

*includes high political and economic risk

Black arrow = Lemminkäinen operates in this market
Grey arrow = Lemminkäinen doesn't operate in this market
Source: Euroconstruct, company's own estimate

 
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